Market Overview

S&P 500 buybacks reverse declines in Q3 2019; expenditures remain lower than the 2018 levels

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NEW YORK, Dec. 17, 2019 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") announced today that preliminary Q3 2019 S&P 500® stock buybacks, or share repurchases, were $175.9 billion – a 6.3% increase over Q2 2019's $165.5 billion. This was the first increase after two consecutive quarters of declines since the record $223 billion in Q4 2018.

Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500

Key Takeaways:

  • Companies reversed declines in buyback expenditures in the past two quarters of this year, posting a 6.3% gain over Q2 2019, as the current level remains significantly higher than 2017 and prior periods. The cumulative rolling four quarters of repurchases continued to impact EPS, as 22.8% of the issues reduced share counts by at least 4% year-over-year, the same level as Q2 2019, but up from the Q3 2018's 17.7%. Over 1-in-5 issues saw at least a 4% EPS tailwind and at this point 14.6% of the issues already have at least a 4% tailwind built into Q4 2019.
  • S&P 500 Q3 2019 dividends set a quarterly record, increasing to $123.2 billion, up 6.4% from the Q3 2018 $115.7 billion; Q4 2019 is set to post yet another record, in the $126 billion range.
  • Total shareholder return of buybacks and dividends for the quarter came in at $299.0 billion, up 5.2% from the Q2 2019 period expenditure of $284.1 billion and down 6.4% from the $319.5 billion reported for Q3 2018.
  • Total shareholder return for the 12-month period ending September 2019 declined to $1.249 trillion from the 12-month June 2019 level of $1.270 trillion, and was up 7.1% from the year-over-year 12-month Q2 2018 level of $1.166 trillion.

"After lowering expenditures in the first half of the year from their tax-inspired record-setting buying spree of 2018, companies increased their share repurchases by 6.3% in the third quarter," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.  "While the levels still pale in comparison to 2018, they are significantly higher than the pre-2018 levels, and surpass the hoped for $170 billion mark, which was seen as the level needed to support stocks and continue reduced share count EPS growth. For Q4, the market is looking for another increase in buybacks, in the mid-single digit range, staying near the $190 billion level, well shy of the Q4 2018 record-setting $223 billion."

Silverblatt also found that buybacks continue to be top heavy, with the top 20 issues accounting for 50.4% of the buybacks, compared to the 10-year average of 44.5%. 

Q3 2019 GICS® Sector Analysis:

Information Technology buybacks continued to decline as a percentage of all buybacks, as they decreased 10.8% to $49.2 billion compared to $55.2 billion for Q2 2019. Twelve-month expenditures were down 7.6% to $233.7 billion from the $253.0 billion spent in the same period in 2018. The sector represents 28.0% of the index's buybacks, down from Q2 2019's 33.4% and 40.4% in Q3 2018.

Financials were right behind Information Technology for expenditures, as they increased 26.4% to $47.8 billion, up from last quarter's $37.8 billion. They represented 27.2% of all buybacks, up from 22.9% in Q2 2019, and are less than one percentage point away from Information Technology's 28.0%.

Materials buybacks continued to be volatile, as they increased 123.1% after declining 49.3% last quarter, spending $5.4 billion on buybacks, up from $2.4 billion last quarter and down from $4.8 billion for Q1 2019. Utilities again declined, spending 11.1% less, to $0.8 billion from last quarter's $0.9 billion and $1.5 billion in Q1 2019.

Health Care buybacks declined 6.2%, to $16.0 billion, from last quarter's $17.1 billion, as they represent 9.1% of all buybacks, down from last quarter's 10.3%. 

Issues:

The five issues with the highest total buybacks for Q3 2019 are:

  • Apple (AAPL) continued to lead in buybacks, spending $17.6 billion in Q3 2019, ranking 8th in S&P 500 history, as the level was down 2.9% from their Q2 2019 $18.2 billion expenditure. Over the past 12-months, Apple has spent $69.7 billion on buybacks, down from $75.3 billion in the prior 12-month period. Over the five-year period they have spent $247.8 billion, more than the market value of Home Depot.
  • Bank of America (BAC): $7.6 billion for Q3 2019, up from $6.5 billion for Q2 2019; in the last 12-months they spent $25.6 billion, up from $19.7 billion.
  • Wells Fargo (WFC): $7.5 billion for Q3 2019, up from their $4.9 billion Q2 2019 expenditure; in the last 12 months they spent $24.7 billion, up from $16.5 billion.
  • JP Morgan (JPM): $6.9 billion for Q3 2019, up from the $5.2 billion spent in Q2 2019; in the last 12-months they spent $23.2 billion, up from $18.9 billion.
  • Alphabet (GOOG/L): $5.7 billion for Q3 2019, up from $3.6 billion for Q2 2019; in the last 12-months they spent $14.9 billion, up from $8.5 billion.

For more information about S&P Dow Jones Indices, please visit www.spdji.com.    

S&P Dow Jones Indices








S&P 500, $ U.S. BILLIONS

(preliminary and estimates in bold)






PERIOD

MARKET

OPERATING

AS REPORTED





DIVIDEND &


VALUE

EARNINGS

EARNINGS

DIVIDENDS

BUYBACKS

DIVIDEND 

BUYBACK 

BUYBACK 


$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

YIELD

YIELD

12 Mo Sep,'19 

$24,706.92

$1,274.15

$1,106.84

$478.94

$770.14

1.94%

3.12%

5.06%

12 Mo Sep,'18

$24,579.28

$1,276.77

$1,106.65

$445.96

$720.40

1.81%

2.93%

4.75%

2018

$21,026.90

$1,281.66

$1,119.43

$456.31

$806.41

2.17%

3.84%

6.01%

2017

$22,821.24

$1,066.00

$940.86

$419.77

$519.40

1.84%

2.28%

4.12%

2016

$19,267.93

$919.85

$818.55

$397.21

$536.38

2.06%

2.78%

4.85%










9/30/2019

$24,707

$330.51

$282.12

$123.12

$175.89

1.94%

3.12%

5.06%

6/28/2019

$24,423

$333.26

$290.00

$118.68

$165.46

1.93%

3.27%

5.20%

3/29/2019

$23,619

$316.56

$291.82

$117.33

$205.81

1.97%

3.49%

5.45%

12/31/2018

$21,027

$293.82

$242.91

$119.81

$222.98

2.17%

3.84%

6.01%

9/30/2018

$24,579

$349.04

$306.70

$115.72

$203.76

1.81%

2.93%

4.75%

6/30/2018

$23,036

$327.53

$288.55

$111.60

$190.62

1.89%

2.80%

4.69%

3/29/2018

$22,496

$311.26

$281.28

$109.18

$189.05

1.90%

2.56%

4.46%

12/29/2017

$22,821

$288.93

$230.12

$109.46

$136.97

1.84%

2.28%

4.12%

9/29/2017

$21,579

$268.35

$243.68

$105.45

$129.17

1.92%

2.40%

4.32%

6/30/2017

$20,762

$261.39

$231.40

$104.01

$120.11

1.96%

2.41%

4.37%

3/31/2017

$20,276

$247.32

$235.65

$100.86

$133.15

1.98%

2.51%

4.49%

12/31/2016

$19,268

$240.11

$207.93

$103.82

$135.29

2.06%

2.78%

4.85%

9/30/2016

$18,742

$247.98

$219.46

$98.43

$112.20

2.10%

2.92%

5.01%

6/30/2016

$18,193

$222.77

$201.79

$98.30

$127.50

2.14%

3.22%

5.36%

3/31/2016

$17,958

$208.99

$189.37

$96.67

$161.39

2.15%

3.28%

5.43%

12/31/2015

$17,900

$201.95

$163.76

$99.39

$145.88

2.14%

3.20%

5.33%

9/30/2015

$16,917

$224.14

$204.58

$95.07

$150.58

2.22%

3.30%

5.52%

 

S&P Dow Jones Indices







S&P 500 SECTOR BUYBACKS






SECTOR $ MILLIONS

Q3,'19

Q2,'19

Q3,'18

12MoSep,'19

12MoSep,'18

5-YEARS

10-YEARS









Consumer Discretionary

$18,372

$15,764

$19,688

$77,509

$81,798

$426,508

$742,619

Consumer Staples

$7,509

$7,114

$10,025

$33,997

$34,351

$208,836

$440,792

Energy

$4,880

$4,552

$7,330

$22,423

$26,932

$88,212

$264,332

Financials

$47,789

$37,819

$40,643

$174,094

$138,316

$621,259

$859,660

Healthcare

$16,007

$17,066

$14,482

$95,158

$93,170

$410,508

$699,142

Industrials

$14,181

$16,967

$15,159

$73,600

$66,775

$354,187

$556,114

Information Technology

$49,241

$55,187

$82,293

$233,713

$253,044

$871,620

$1,373,018

Materials

$5,400

$2,420

$3,014

$18,449

$10,601

$61,764

$113,442

Real Estate

$694

$555

$520

$3,138

$3,602

$10,029

$10,029

Communication Services

$11,028

$7,132

$10,092

$34,061

$10,690

$52,070

$83,086

Utilities

$784

$882

$509

$3,994

$1,119

$9,142

$18,756

TOTAL

$175,886

$165,458

$203,756

$770,135

$720,397

$3,114,135

$5,160,989

 

S&P Dow Jones Indices








S&P 500 20 LARGEST Q3 2019 BUYBACKS, $ MILLIONS 






Company  

Ticker

Sector

Q3 2019

12-Months

12-Months

5-Year

10-Year

Indicated




Buybacks

Sep,'19

Sep,'18

Buybacks

Buybacks

Dividend




$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Apple 

AAPL

Information Technology

$17,635

$69,714

$75,265

$247,797

$320,049

$14,808

Bank of America

BAC

Financials

$7,626

$25,627

$19,732

$60,790

$65,685

$7,447

Wells Fargo 

WFC

Financials

$7,459

$24,757

$16,518

$68,966

$87,356

$9,877

JPMorgan Chase 

JPM

Financials

$6,949

$23,178

$18,863

$68,851

$90,405

$11,511

Alphabet 

GOOGL

Communication Services

$5,696

$14,948

$8,526

$31,692

$32,610

$0

Oracle 

ORCL

Information Technology

$5,519

$31,816

$21,366

$74,484

$105,087

$4,852

Citigroup

C

Financials

$4,978

$12,855

$15,800

$53,997

$57,889

$4,608

Microsoft 

MSFT

Information Technology

$4,912

$20,711

$11,895

$74,488

$116,365

$15,576

Intel 

INTC

Information Technology

$4,521

$11,874

$8,464

$34,421

$65,163

$5,582

LyondellBasell 

LYB

Materials

$3,240

$4,805

$801

$15,507

$21,803

$1,829

Procter & Gamble 

PG

Consumer Staples

$3,000

$6,751

$5,754

$24,090

$53,999

$7,458

Charter Communications

CHTR

Communication Services

$2,767

$5,753

$7,181

$22,283

$23,066

$0

Starbucks 

SBUX

Consumer Discretionary

$2,255

$10,334

$7,196

$23,269

$26,278

$1,963

Visa

V

Information Technology

$2,132

$8,718

$7,286

$33,238

$46,605

$2,072

Mastercard 

MA

Information Technology

$1,803

$6,553

$5,156

$21,721

$30,291

$1,803

DaVita

DVA

Health Care

$1,764

$1,837

$1,643

$4,973

$5,876

$0

Facebook

FB

Communication Services

$1,739

$8,661

$13,886

$26,001

$29,756

$0

Johnson & Johnson 

JNJ

Health Care

$1,628

$10,128

$2,875

$35,636

$60,511

$10,029

Morgan Stanley

MS

Financials

$1,538

$5,633

$5,664

$21,297

$24,020

$3,045

McDonald's 

MCD

Consumer Discretionary

$1,468

$4,458

$5,029

$31,806

$44,772

$3,797

Top 20   



$88,629

$309,111

$258,900

$975,307

$1,307,586

$106,257

S&P 500



$175,886

$770,135

$720,397

$3,114,135

$5,160,989

$546,855

Top 20 % of S&P 500



50.39%

40.14%

35.94%

31.32%

25.34%

19.43%

   Gross values are not adjusted for float







 

S&P Dow Jones Indices




S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q3 2019; Apple added at #8

$ MILLIONS

QUARTER

COMPANY

SECTOR


$23,811

Q1 2019

Apple

Information Technology

1

$22,908

Q1 2018

Apple

Information Technology

2

$21,860

Q2 2018

Apple

Information Technology

3

$21,162

Q2 2006

QUALCOMM

Information Technology

4

$19,364

Q3 2018

Apple

Information Technology

5

$18,154

Q2 2019

Apple

Information Technology

6

$18,036

Q1 2014

Apple

Information Technology

7

$17,635

Q3 2019

Apple

Information Technology

8

$17,319

Q3 2014

Apple

Information Technology

9

$16,413

Q2 2013

Apple

Information Technology

10

$15,707

Q3 2007

International Business Machines 

Information Technology

11

$13,420

Q3 2015

Apple

Information Technology

12

$12,852

Q4 2013

Johnson & Johnson 

Healthcare

13

$12,318

Q4 2016

Allergan plc 

Healthcare

14

$12,183

Q2 2012

Johnson & Johnson 

Healthcare

15

$11,480

Q4 2016

Apple

Information Technology

16

$11,133

Q4 2017

Apple

Information Technology

17

$10,776

Q2 2016

Apple

Information Technology

18

$10,724

Q2 2015

Apple

Information Technology

19

$10,723

Q1 2016

Home Depot

Consumer Discretionary

20

 

S&P Dow Jones Indices





S&P 500 Q3 2019 Buyback Report









SECTOR

DIVIDEND

BUYBACK 

COMBINED



YIELD

YIELD

YIELD


Consumer Discretionary

1.65%

3.08%

4.73%


Consumer Staples

3.63%

1.78%

5.41%


Energy

4.11%

1.96%

6.07%


Financials

2.35%

4.83%

7.18%


HealthCare

1.78%

2.56%

4.34%


Industrials

2.02%

3.03%

5.06%


Information Technology

1.44%

3.87%

5.32%


Materials

2.26%

2.67%

4.93%


Real Estate

3.36%

0.41%

3.77%


Communications Services

1.53%

1.49%

3.01%


Utilities

3.17%

0.46%

3.63%


S&P 500

2.11%

2.96%

5.07%


   Uses full values (unadjusted for float)




   Dividends based on indicated; buybacks based on the last 12-months ending Q3,'19

 

Share Count Reduction (SCR)

SCR 

SCR

(Y/Y diluted shares used for EPS)

>=4%

<=-4%

Q3 2019

8.62%

22.85%

Q2 2019

7.98%

24.15%

Q1 2019

8.03%

24.90%

Q4 2018

8.45%

18.71%

Q3 2018

6.43%

17.67%

Q2 2018

6.20%

15.60%

Q1 2018

7.01%

13.63%

Q4 2017

6.83%

15.06%

Q3 2017

8.62%

14.23%

Q2 2017

10.00%

14.00%

Q1 2017

12.00%

14.80%

Q4 2016

10.48%

19.35%

Q3 2016

9.94%

23.73%

 

 

 

ABOUT S&P DOW JONES INDICES

S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.

S&P Dow Jones Indices is a division of S&P Global (NYSE:SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit: www.spdji.com.

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SOURCE S&P Dow Jones Indices

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